Zelle Is Your New Friend-Paying Service
You’ve probably just got used to paying your friends after a night out with a ride to your favorite friends paying app. Unfortunately for them, single-purpose payment apps like Venmo and Square may have some competition from their biggest threat: real banks.
Zelle isn’t exactly an iOS or Android app, but it will appear on your phone before you know it. It is a new payments network created by a coalition of major banking institutions to tackle the growing threat of peer-to-peer payment services such as Apple Pay, Google Wallet, Venmo, and Facebook. Banks and credit unions participating in Zelle include Bank of America, Chase, CapitalOne, and USAA, among others.
Zelle will live in your bank’s app, which means you don’t have to download another one as you, like everyone else, already have a bank app on your phone. It will work like a standard bank transfer, but it will have a bit of Zelle branding depending on the bank you choose. Since it is backed by several large banks, this means that it has access to some perks that its competitors do not have.
First, transfers between Zelle users are instantaneous, whereas other companies usually take at least one business day to transfer funds (Zelle says transactions involving non-Zelle users can take anywhere from one to three business days). You can send money to people who don’t use Zelle using their phone number or email address.
Plus, your Zelle transactions don’t linger inside any app account, teasing you with the $ 18 you paid for drinks last week and forcing you to jump over again to get your hard-earned cash. Venmo stores money in your Venmo account, and Apple’s new peer-to-peer Apple Pay service will store any cash received on its Apple Pay Cash card. Last time I checked, I didn’t choose a bank either.
I would argue that Zelle is bound to become popular simply because the banking app is like the fourth app found on all smartphones. However, the momentum from Venmo, coupled with the upcoming iMessage-enabled payment service, Apple Pay could make the race to make your new wallet more competitive than ever.